For Immediate Release
Chicago, IL – September 09, 2016 – Zacks Equity Research highlights Smith & Wesson (SWHC) as the Bull of the Day and SEI Investments (SEIC) as the Bear of the Day. In addition, Zacks Equity Research provides analysis Bank of America (NYSE:BAC) (BAC), Chubb (NYSE:CB) Limited ( CB) and Apache Corp (NYSE:APA) (APA).
Here is a synopsis of all five stocks:
Smith & Wesson (SWHC) is no stranger to controversy. Gun advocates will tell you that people kill people while anti-gun supports say that people use guns to kill people. While both sides have their points, investors tend to think of SWHC as a stock that can benefit anytime the discussion comes up again. SWHC is a Zacks Rank #1 (Strong Buy) stock and it is the Bull of the Day.
The Numbers
SWHC beat the Zacks Consensus Estimate of $0.53 when it reported $0.62 in the first week of September. This $0.09 beat was good for a 17% positive earnings surprise.
The topline was also impressive with the company delivering $207M in sales when the Zacks Consensus Estimate was looking for $197M. That $10M beat was good for an 5% positive revenue surprise.
Description
Smith & Wesson Holding Corporation is one of the world's leading producers of handguns, law enforcement products and firearm safety and security products. Law enforcement personnel, military personnel, target shooters, hunters, collectors and firearms enthusiasts throughout the world have used the company's products with confidence for 150 years. Smith & Wesson Corp. also manufactures and markets Smith & Wesson branded handcuffs and other products utilizing its metal working expertise and providing products and services to many external customers.
Earnings History
The last time SWHC missed the Zacks Consensus Estimate was in 2011. Since then, there has been a string of 21 consecutive positive earnings surprises. This is a very enviable track record and demonstrates management's ability to guide Wall Street to a beatable number and then still outperforming expectations.
Estimates
When you have a Zacks Rank #1 (Strong Buy) you are going to see positive earnings estimate revisions. Following the most recent beat, the Zacks Consensus Estimate for 2016 has moved from $1.87 to $2.47. That is a huge move.
The 2017 Zacks Consensus Estimate was $2.15 prior to the earnings release and has since moved higher to $2.39
Valuation
One thing that I have been looking for in stocks lately is room for multiple expansion. SWHC has that in spades. The stock trades at just 11x forward earnings compared to an industry average of 27x. The price to book multiple of 4.6x is inline with the industry average but the price to sales multiple of 2x is also showing a discount the industry average of 3x.
SEI Investments (SEIC) recently missed the Zacks Consensus Estimate on top and on bottom. It is now a Zacks Rank #5 (Strong Sell) and is the Bear of the Day.
Description
SEI Investments is a global provider of asset management and investment technology solutions. The company's innovative solutions help corporations, financial institutions, financial advisors, and affluent families create and manage wealth. They provides global investment solutions to institutions and individuals and business solutions to investment intermediaries. They serve corporations, banks, insurance companies, unions, foundations, endowments and individuals with a wide array of investment products and administration services.
Recent Earnings
SEIC missed the Zacks Consensus Estimate of $0.50 by a penny. Revenue came in at $344M while the Zacks Consensus Estimate was looking for $347M.
Estimates
The Zacks Consensus Estimate has been falling over the last few months. The FY16 estimate stood at $2.25 in December of last year and then fell to $2.03 in April. The estimate currently states at $1.93.
Next year has also seen a move lower in estimates with the 2017 Zacks Consensus Estimate moving from $2.73 to $2.28 over the same time period.
Additional content:
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Today's Research Daily features analyst reports on 16 major stocks, including Bank of America (BAC), Chubb Limited (CB) and Apache Corp ( APA). These 16 research reports have been handpicked from the more than 70 reports issued by our research team this morning. You can see the complete list of today's research reports here >>>
Bank of America shares have outperformed its peer group and the broader market over the last few weeks, with market participants coming around to acknowledging the bank's efforts to realign its balance sheet and streamline core operations. Growing confidence in the bank's balance sheet, as reflected in its approved 2016 capital plan, and a strong deposit franchise are some of the other positives in the Bank of America story that should help the bank navigate an otherwise tough operating environment for banks. (You can read the full research report on Bank of America here>>)
Chubb shares have remained flat recently but are up nicely on the year. The analyst likes Chubb's leadership position in the property and casualty insurance space as a result of its complementary products and services. Its impressive inorganic growth story and strong capital position are other positives. Recently, the company introduced its marine service capabilities in China, which will allow the company to offer customized insurance solutions and risk management services to clients. (You can read the full research report on Chubb here>>)
Apache shares responded strongly to the announcement of a big discovery in the Permian basin, potentially opening up a new multi-year resource play for the E&P major. The analyst likes the company’s geographically diversified reserve base and multi-year trend in reserve replacement and production growth. Initiatives to align capital spending with its cash flows are also encouraging. It continues to build up a high-quality inventory of projects capable of delivering attractive returns even in a low oil price environment (You can read the full research report on Apache Corp here>>)
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SMITH & WESSON (SWHC): Free Stock Analysis Report
SEI INVESTMENTS (SEIC): Free Stock Analysis Report
APACHE CORP (APA): Free Stock Analysis Report
CHUBB LTD (CB): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis Report
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